A short history of Bitcoin

Bitcoin's exchange rate was established at US$1 = 1,309.03 BTC on October 5th 2009 using an equation that considered the amount of electricity required to mine a unit of the virtual currency.

The first real-world Bitcoin transaction happened on May 22nd 2010 in Florida, when Laszlo Hanyecz, a programmer, offered to pay 10,000 Bitcoins for a $25 pizza on the Bitcoin Forum. However, Bitcoin reach parity with the U.S. cent for the first time in June 2011 at US$ 0.01 per BTC.

Concerns were raised by the Financial Action Task Force, an inter-governmental body, as early as October 2010 about the challenges posed by virtual currencies to regulators. In its report, the FATF flagged the potential for misuse by criminals, terrorist financiers and other sanctions evaders.

However, Bitcoin remained unregulated until March 2013 when the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury, claimed regulation over Bitcoin miners, payment processors and exchanges. Germany recognised Bitcoin as a form of private money, or "unit of account" later that year. These developments provided greater legal certainty around the currency's prospects.

Bitcoin gained greater recognition over the course of 2013 when services such as Mega, OkCupid and the Internet Archive started accepting Bitcoin payments. By April 2013, Bitcoin surpassed $100 before reaching speculative highs later that year. However, the closure of the Silk Road, an infamous crime marketplace, and seizure of US$ 3.6 million worth of Bitcoins, in October of that year had a cooling effect on currency's price.

Since, merchant adoption has continued to rise, driven by consumer interest and greater certainty around the currency's regulatory framework. Microsoft started accepting Bitcoins for purchases of Xbox games and Windows apps in December 2014. In 2016, the gaming platform Steam and the Swiss railways operator also started accepting Bitcoin for payments.

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